STATE BANK OF PATIALA versus ROMESH CHANDER KANOJI AND ORS.

Citation: [2004] 2 S.C.R. 615 · Decided: 24-02-2004 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed
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Judgment (excerpt)

STATE BANK OF PATIALA 
A 
v. 
ROMESH CHANDER KANOJI AND ORS. 
FEBRUARY 24, 2004 
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[V.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.] 
B 
Service Law: 
,, 
Voluntary Retirement Scheme-State Bank of Patiala Voluntary 
Retirement Scheme-Clauses 5, 8, 9(i)-Employees opting for Voluntary c 
· Retirement Scheme-Withdrawal of application after closure of Scheme-
Refusal by Bank-Justification of-Held: Scheme is an invitation to offer and 
not an offer-It gives locus poenitentiae to an employee to withdraw by the 
date of closure of scheme after which mode of acceptance would apply-
Hence, employees precluded from withdrawing from the Scheme after its D 
closure-Contract Act, 1872. 
In terms of the ratio laid do'Wn by three Judge Bench of this Court in 
Bank of India v. O.P. Swarnakar's case employee is ensured in State Bank of 
India Voluntary Retirement Scheme(SBIVRS) the right of withdrawal within 
the period specified. In State Bank of Patiala v. Jagga Singh 's case the Division E 
Bench of this Court held that State Bank of Patiala being subsidiary of State 
Bank of India, and that Clause (8) of SBPVRS giving opportunity to the 
employee to withdraw being similar to clause (7) ofSBIVRS, allowed Bank's 
appeal in terms of O.P. Swarnakar's case. 
In the instant case, State Bank of Patiala, subsidiary of State Bank of F 
India, published their Voluntary Retirement Scheme (SBPVRS) drawn up in 
the light of the guidelines issued by the Indian Banks Association. The Scheme 
was to open on February 15, 2001 and was to dose on March 1, 2001. Clause 
(5) of the scheme gave 15 days time to the employees to opt for the scheme, 
clause (8) gave two months to the management to work out the scheme, and G 
clause 9(i) provided the general conditions and that the applications once made 
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cannot be withdrawn. Respondents applied under the SBPVRS. However, they 
withdrew their application for voluntary retirement. Bank did not allow the 
respondents to withdraw from the scheme as the withdrawal was made after 
the date of the closure of the Scheme. Respondents filed writ petition 
•r 
615 
H 
616 
SUPREME COURT REPORTS 
[2004] 2 S.C.R. 
A challenging the decision of the bank. High Court quashed the SBPVRS and 
allowed the writ petitions holding that even if it is assumed that the scheme 
was validly framed, employee could withdraw his option before the same is 
accepted and effectively enforced. 
The question which arose for consideration in these appeals is with 
B regard to the determination of scope of judgment of this Court in the case of 
Bank ofindia v. 0.P. Swarnakar and State Bank of Patiala v. Jagga Singh. 
Respondent-employees contended that clause 9(i) of SBPVRS was 
similar to clause 10.5 of the scheme of other nationalized banks inasmuch as 
C it provided that application once made cannot be withdrawn; and that in the 
case of Jagga Singh Division Bench of this Court did not notice that clause 
9(i) of the SBPVRS was dis-similar to SBIVRS, which gave employee an 
opportunity to withdraw, thus the judgment of Jagga Singh needs 
reconsideration. 
D 
Allowing the appeals, the Court 
HELD: l.1. Voluntary Retirement Schemes are basically funded 
schemes. Under such schemes, time is given to every employee to opt for 
voluntary retirement and similarly time is given to the management to work 
out the. scheme. The management is required to create a fund which depends 
E upon number of applications, the cost of the scheme, liability which the scheme 
would impose on the bank and such other variable factors. If the employees 
are allowed to withdraw from the scheme at any time after their closure, it 
would not be possible to work out the scheme as all calculations of the 
management would fail. [621-B-C] 
F 
1.2. SBPVRS is an invitation to offer and not an offer. Therefore, Clause 
5 of SBPVRS gives locus poenitentiae to the employee to withdraw ~y 1.3.2001 
after which the mode of acceptance contemplated by clause 8 of the SBPVRS 
would apply and the bank will proceed to vet the applications. [621-C, E] 
1.3. Each scheme for the purposes of enforceability is required to be 
G read as a whole. Reading clauses 5, 8, and 9(i), it is clear that employees .are 
precluded from withdrawing from the SBPVRS after the closure of the scheme 
on 1.3.2001. [622-A; 621-G) 
Bank of India v. O.P. Swarnakar and Ors., (2003) 2 SCC 721, held 
H applicable. 
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STATE BANK OF PATIALA v. R.C. KANOJI [KAPADIA, J.] 
617 
State Bank of Patial
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